Hanesbrands Raises Profit Guidance on Q3 Earnings & Sales Beat

Earnings Performance - The company posted adjusted earnings from continuing operations of 15 cents per share, surpassing the Zacks Consensus Estimate of 11 cents and showing a significant improvement from the adjusted loss of 2 cents per share in the year-ago quarter [3] - Net sales from continuing operations declined 2.5% to $937.1 million but exceeded the Zacks Consensus Estimate of$ 928 million [4] - Adjusted gross profit increased by 11% year over year to $392 million, with the adjusted gross margin rising by 525 bps to 41.8% [5] - Adjusted operating profit surged 46% year over year to$ 122 million, with the adjusted operating margin increasing by 435 bps to 13% [6] Segment Performance - The U.S. segment's net sales dropped 1% year over year to $678.3 million, but the segmental operating margin improved by 665 bps to 22.1% [8] - International net sales grew 1.3% to$ 259.1 million, with a 4% increase at constant currency, driven by growth in the Americas and Asia [9] - The international segment's operating margin improved by 465 bps to 14.2%, supported by reduced input costs and cost-saving measures [9] Financial Health - The company ended the quarter with cash and cash equivalents of $317.3 million, long-term debt of$ 3,211.2 million, and total stockholders' equity of $149.3 million [10] - Year-to-date cash flow from operations amounted to$ 197 million, with free cash flow of $165 million [11] - The company had approximately$ 1.1 billion of available capacity under its credit facility at the end of the quarter [10] Guidance and Expectations - For 2024, net sales from continuing operations are anticipated to be around $3.61 billion, reflecting a 4% year-over-year decline on a reported basis and a 2% decline on an organic basis at constant currency [12] - Adjusted operating profit from continuing operations is expected to be$ 417 million, with adjusted EPS from continuing operations envisioned at approximately 39 cents [13] - Cash flow from operations is forecasted to be nearly $250 million, with free cash flow expected to be approximately$ 210 million in 2024 [14] - For Q4 2024, net sales from continuing operations are expected to be around $900 million, suggesting a 2% year-over-year growth on a reported basis and a 3% increase on an organic basis at constant currency [15] - Adjusted operating profit from continuing operations for Q4 is likely to be around$ 115 million, with adjusted earnings from continuing operations envisioned at about 14 cents per share [16] Strategic Actions - Strategic actions to streamline and focus the business are delivering results, enabling significant changes to the cost structure, boosting operational efficiency, lowering inventory, and freeing capital for growth investments [2] - These efforts are expected to drive improvements in margins, cash flow, and debt reduction through 2025 [2]